Decline in fuel prices prompts Vivo energy to set up 23 million litre diesel tank

Consumers are set to benefit from a 23 million litre diesel storage tank courtesy of Vivo Energy Kenya that has been opened at the company’s Mombasa terminal. The tank boasts the largest diesel storage capacity in the country by one oil marketer.

The opening of the tank would ensure availability of diesel in each and every part of the nation thus reducing the price of the product, economists have said.

The firm has also opened a 5 million litre petrol storage tank, bringing the company’s total diesel storage to 53 million litres whereas petrol storage remains at 29 million litres.

“Additional storage will enable Vivo Energy Kenya to support its rapidly growing retail business which has witnessed a 54 per cent growth over the last three years. It also increases flexibility to support inland markets like Uganda.” said Vivo Energy Kenya Managing Director, Polycarp Igathe.

He added that the company will save money on shipping demurrage costs as fewer fuel tanker discharges will be needed.

Since 2014, Vivo Energy has increased the number of Shell service stations in Kenya by 54 per cent from 112 to 172. In October 2015 the firm opened a 14 million litre petrol storage at the same facility.

Standard Investment Research Bank data indicates that the increase in storage capacity is not entirely a surprise as oil prices have declined, while robust volume growth has been witnessed by downstream oil marketers.

“In the first half of 2016, Kenol Kobil volumes surged 23 per cent. The strategy to increase capacity however depends on the strategy adopted by the company and financial position,” the research bank commented.

Vivo Energy was formed in November 2012 with Vitol and Helios each owning a 40 per cent stake, with Shell holding the remaining 20 per cent.

Vivo Energy operates 1600 service stations across 16 African countries.

 

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